14/10/18

Angola, Africa's second largest oil producer, has ramped up its financial ties with Beijing, but perhaps to its own detriment, The country's state newspaper Jornal de Angola said on Wednesday that the country had secured $2 billion in Chinese funding from the China Development Bank for infrastructure projects. Angolan President João Lourenco secured the financing during his first visit to Beijing, the report added.

Details of the deal were not released, according to various media outlets. A Reuters report said on ....

Voters in Germany's economically dominant southern state of Bavaria delivered a stunning rebuke to the ruling Christian Social Union, in an election that underscored the evaporation of support for the parties in Angela Merkel's grand coalition in Berlin.

With all eyes on Sunday's Bavaria election, moments ago the first exit polls were published and showed a historic collapse for the ruling CSU party, which has ruled Bavaria continuously since 1957, and which saw its share of the vote collapse from 47.7$ in the 2013 election to just 35.5%, losing its absolute majority and suffering its worst result since 1950, as voters defected in their droves to the Greens and the far-right Alternative for Germany.

The CSU was followed by the Greens which soared in the election, more than doubling to 18.5% from 8.6% in 2013, the FW also rose to 11% from 9.0%, in 2013, while the nationalist AfD was set to enter the Bavarian regional assembly for the first time with 11% of the vote. Meanwhile, the other establishment party, the left-of-center SPD also saw its support collapse from 20.6% in 2013 to just 10% today.

Long term market trends remain intact, yet charts indicate a market on a knife's edge as significant technical damage has been inflicted. Markets are deeply oversold and the nature of the next rally will be determine whether this bull market can survive or if a larger bear market may begin to unfold. The larger message: New highs or bust.

In this week's update I'll give you both some of the bullish and bearish perspectives focusing mainly on technical considerations.

Before I dive into some of the arguments first some context and perspective on this correction because it is so critical to understanding the big picture and why this correction may be different.

Yes, Something Broke

In this missive, we are just going to focus on the "WTF!" moment of this past week. In order to do this properly, I need to start with last week's missive where we asked the question "Did Something Just Break?"In that article we addressed very specific concerns about interest rates and the problem they were going to cause.

"Speaking of rates, each time rates have climbed towards 3%, the market has stumbled."

Saudi Arabia warned on Sunday it would respond to any "threats" against it as its stock market crashed the most since 2016 after President Trump's warning of "severe punishment" over the disappearance of Washington Post contributor Jamal Khashoggi.